• Q4 2024 Revenue: $2.26 billion, up 11% year-over-year.
• Full Year 2024 Revenue: $8.92 billion, up 11.2% year-over-year.
• Q4 2024 Adjusted EBITDA: $732 million, 32.4% of revenue.
• Full Year 2024 Adjusted EBITDA: $2.902 billion, up 15% year-over-year, with a margin of 32.5%.
• Adjusted Free Cash Flow 2024: $1.218 billion, exceeding expectations.
• Acquisition Revenue Contribution 2024: $529 million for the full year.
• Core Pricing Q4 2024: 6.7%.
• Solid Waste Core Pricing 2024: 7.1%.
• Chiquita Canyon Landfill Closure Costs: $116.1 million write-down and $480.8 million in closure and post-closure liabilities.
• 2025 Revenue Outlook: $9.45 billion to $9.6 billion.
• 2025 Adjusted EBITDA Outlook: $3.12 billion to $3.2 billion, with a margin of 33% to 33.3%.
• 2025 Adjusted Free Cash Flow Outlook: $1.3 billion to $1.35 billion.
• Q1 2025 Revenue Outlook: $2.2 billion to $2.225 billion.
• Q1 2025 Adjusted EBITDA Outlook: $700 million to $710 million, 31.8% to 31.9% of revenue.

• Warning! GuruFocus has detected 5 Warning Signs with HBI.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Waste Connections Inc (NYSE:WCN) achieved double-digit growth in both revenue and adjusted EBITDA for Q4 2024.
• The company successfully integrated acquisitions totaling approximately $750 million in annualized revenue in 2024.
• Employee turnover reached multiyear lows, improving operational execution and contributing to margin expansion.
• Price-led organic solid waste growth and improving commodities are expected to position the company at the high end of its financial outlook for 2025.
• The company has a robust acquisition pipeline, with over $75 million in annualized revenue already closed or signed for 2025.

Negative Points

• The closure of the Chiquita Canyon landfill resulted in significant financial impacts, including a $116.1 million write-down and $480.8 million in closure liabilities.
• Solid waste volumes in Q4 2024 were down 2.7%, reflecting a focus on quality of revenue and shedding unprofitable contracts.
• The company faces headwinds from declining commodity values, RINs, and FX rates, impacting margins.
• Incremental costs associated with the Chiquita Canyon ETLF event exceeded expectations, with significant outlays projected for 2025.
• Despite strong acquisition activity, the company anticipates continued volume declines due to strategic shedding and economic conditions.

Q & A Highlights

Q: Can you clarify the expected green CapEx spending for 2025 and its impact on cash flow? A: Mary Anne Whitney, CFO: Yes, we expect green CapEx to be around $125 million at the midpoint in 2025, up from $60 million in 2024. This spending will largely conclude by 2026, with potential benefits from tax credits reducing the net impact.

Q: What is the expected timeline for the financial impact of the Chiquita Canyon landfill closure? A: Ronald Mittelstaedt, CEO: We spent $224 million in 2024 on Chiquita Canyon, which will decrease to around $125 million in 2025 and further reduce by 2026. By 2027, costs should be minimal, around $0 to $20 million.

Q: How do you view the potential for volume growth in 2026 and beyond? A: Ronald Mittelstaedt, CEO: Volume growth could turn positive in 2026, but it depends on economic conditions and our strategic shedding of unprofitable contracts. We focus on margin over volume, with a conscious trade-off between price and volume.

Q: How is employee retention in acquired businesses, given the high M&A activity? A: Ronald Mittelstaedt, CEO: Employee turnover is higher in acquired companies, often reaching 30-35% initially due to our rigorous safety standards. However, our core company turnover is much lower, indicating strong retention overall.

Q: What is the outlook for price trends in 2025? A: Mary Anne Whitney, CFO: We expect core pricing to be around 6% in 2025, with CPI-linked markets contributing about 4% and competitive markets around 7-7.5%. Pricing will likely start higher and decrease throughout the year.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.